FTSE 100 company boards should move away from being made up of all-white board members by 2021, according to the final recommendations from a government-backed study into improving the diversity of UK businesses.
Currently, more than half of FTSE 100 firms have no ethnic minorities on their board.
The Parker Review Committee, headed by Sir John Parker, has published its final findings – A report into the ethnic diversity of UK boards – informing business leaders on improving the ethnic and cultural diversity of UK boards to better reflect their employees and the communities they serve.
The three key recommendations set out by the report are to:
– Increase the ethnic diversity of UK boards by proposing each FTSE 100 board have at least one director from an ethnic minority background by 2021, and for each FTSE 250 board to do the same by 2024
– Develop a pipeline for candidates and plan for succession through mentoring and sponsoring
– Enhance transparency and disclosure to record and track progress against the objectives.
Companies that do not meet the board composition targets by the set date ‘should disclose in their annual report why they have not been able to achieve compliance,’ the report states.
As of the end of July, only 85 of the 1,050 director positions in the FTSE 100 were held by individuals from an ethnic minority, and only 2 percent of director positions were held by ethnic minorities who are UK citizens, though this group makes up 14 percent of the total UK population.
The steering committee will track the progress made against the recommendations on an annual basis.
Parker says: ‘Today’s FTSE 100 and FTSE 250 boards do not reflect the society we live in, nor do they reflect the international markets in which they operate. While we are making good progress on gender diversity in the boardroom, we still have much to do when it comes to ethnic and cultural diversity.’
